Clients often assume it is always a good thing to pay a mortgage (and other debts like student loans) off sooner vs. later- however that is not always true.
Here are some things to consider and discuss with financial professionals like CPAs and Financial Planners:
1) How does your mortgage interest rate compare to rates on your retirement and investment accounts? The “extra” money you may be contributing to pay down the mortgage might earn more elsewhere if you have a low mortgage rate.
2) If you think you might apply for need-based college aid for your children home equity could count against you with some colleges because the equity is viewed the same as money in the bank.
3) There can be tax advantages to writing off mortgage interest and if that disappears early your tax liabilities could increase.
Remember, you can’t get the money back from the bank once you pay down the mortgage, however if after doing your research you decide paying off the mortgage early is to your advantage, Bankrate offers these illustrated options.
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